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Hoping for a drop in Kansas City property prices in 2025? Don’t count on it.
Despite the ups and downs, the Kansas City market is set to rise, driven by strong demand and limited housing supply.
Let’s explore why property prices in this city are expected to climb in 2025.
We rely on solid, reliable data and statistics from multiple trusted sources, ensuring our analysis is grounded in fact.
We thoroughly examine this data and present our own conclusions at the end of the blog post. Enjoy the read!
How this content was produced 🔎📝
This article offers thoughtful insights and analysis based on reliable sources, but it should not be considered financial advice. We work hard to research, compile, and analyze data to give you a well-informed perspective. However, as you can guess, our analysis involves subjective choices, such as source selection and methods, and it cannot fully capture the market's complexity. Please, always do your own research, consult professionals, and make decisions based on your own judgment. Any financial risks or losses are your responsibility. Additionally, you should know that we have no affiliation with the sources mentioned, ensuring our analysis is completely impartial.
1) In Kansas City, there are only about "0.48 homes" for each person, which is quite limited
Signal strength: strong
In Kansas City, there is approximately 0.48 home per inhabitant, which indicates a relatively tight housing market.
This ratio suggests that housing supply is limited compared to the number of people who might need a home. When supply is limited and demand remains steady or increases, prices tend to rise as more people compete for fewer available homes.
One local factor contributing to this situation is that Kansas City has been experiencing growth in its tech and startup sectors, attracting more professionals to the area. As these sectors expand, the demand for housing increases, further tightening the market.
If the ratio were to increase to 0.6 home per inhabitant, it might suggest a more balanced market, potentially stabilizing prices.
Source: USCensus
2) Kansas City home values have already risen by 0.5% since last year, and this trend may persist
Signal strength: strong
The fact that home values in Kansas City have already changed by 0.5% since last year is a key indicator that the housing market is on an upward trend. This change suggests that there is a growing demand for homes, which often leads to an increase in prices.
Currently, the median home price in Kansas City is around $235,610, which is relatively affordable compared to other major cities. Additionally, the median sales price per square foot is around $157, indicating that buyers are willing to pay more per unit of space.
These figures suggest that the market is gaining momentum, and if this trend continues, housing prices are likely to rise in 2025. Investors should consider these signals as part of their decision-making process, as they point to a potential increase in property value.
However, if the home value change were to drop below 0%, it might indicate a stagnation or decline in the market, which would suggest a different investment strategy.
Source: Redfin
We created this infographic to show how property prices in Kansas City compare to other big cities in Missouri. It shows the median price as well as the price per sqft, making it easy to see which places might offer the best value. We hope you find it helpful.
3) Three major websites confidently predict that home prices in Kansas City will rise in 2025
Signal strength: strong
There are three major websites forecasting a positive growth for home prices in Kansas City in 2025, which is a promising signal for potential investors.
Among these forecasts, Realtor is the most optimistic with a projected increase of 6.90%, followed by Redfin's forecast of 4%, and finally, Zillow predicts a 2.60% rise in home prices. The significant gap between these forecasts suggests varying levels of confidence in the market's growth potential.
While these predictions are encouraging, it's important to remember that forecasts should be taken with caution as they are based on assumptions and models that may not fully capture future market dynamics. Therefore, we will also rely on strong, reliable, and actual data to make a well-informed investment decision.
If these forecasts were to predict a negative growth or a decline in home prices, it would signal a potential downturn in the market.
Sources: ZillowForecasts, RedfinForecasts, RealtorForecasts
4) Kansas City has a "Livability" score of 78, indicating it's a good place to live
Signal strength: moderate
The livability score of 78 in Kansas City is considered good because it reflects a balance of factors that make the city attractive to residents.
One key characteristic is the vibrant arts and culture scene, which includes numerous galleries, theaters, and music venues that draw both locals and tourists. Additionally, Kansas City is known for its affordable cost of living, which is lower than the national average, making it an appealing place for families and young professionals. The city also boasts a strong job market, particularly in sectors like healthcare, technology, and finance, which attracts a skilled workforce.
These factors contribute to the assumption that housing demand will increase as more people are drawn to the area, potentially driving up prices in 2025. A good livability score often indicates a desirable place to live, which can lead to increased real estate investment and higher property values.
However, if the livability score were to drop below 70, it might suggest declining conditions, which could deter potential buyers and investors.
Source: AreaVibes
Our team designed this infographic to show how competitive the real estate market in Kansas City is vs. other major cities in Missouri. It shows the percentage of sales above the list price, a key indicator of market competition.
5) In Kansas City, about 35% of homes sell for more than their listing price
Signal strength: moderate
In Kansas City, around 35% of sales close at a price higher than the listing price, which is a strong indicator of a competitive housing market.
This means that buyers are willing to pay more than the asking price to secure a property, suggesting that demand is outpacing supply. When demand exceeds supply, prices tend to rise as buyers compete for available homes.
Such a trend often leads to increased property values over time, making it a favorable environment for real estate investment. If this pattern continues, housing prices are likely to go up in 2025 in Kansas City.
However, if the percentage of sales closing above the listing price drops significantly, say to below 10%, it might indicate a cooling market where prices could stabilize or even decrease.
Source: Zillow
6) In the past decade, home prices in Kansas City have consistently risen by an average of 8.2% each year
Signal strength: moderate
The fact that home prices in Kansas City have appreciated at an average rate of 8.2% over the last decade is a strong signal for potential investors. This consistent growth rate suggests a history of demand and price growth, which can indicate favorable conditions for future increases.
While it's important to remember that past performance doesn’t guarantee future results, historical trends can still provide valuable insights. A positive 10-year average appreciation rate often reflects underlying economic stability and attractiveness of the area, making it a good indicator to consider.
Investors should be aware that other factors, such as economic changes or shifts in local policies, can also impact future housing prices. Therefore, while the historical appreciation rate is promising, it's crucial to analyze current market conditions alongside it.
If the appreciation rate were to drop significantly, say below 3% over a similar period, it might suggest a weakening market, potentially altering investment decisions.
Source: NeighborhoodScout
This infographic we have made will show you how market values have changed during the last decade in Kansas City vs other major places in Missouri. Here, the percentage increase or decrease in market value will help you see long-term trends.
7) Kansas City's median home price is significantly lower, at 46% below the "national average."
Signal strength: minimal
The fact that Kansas City still has a median home price 46% below the national average suggests that there is significant room for growth in the housing market. This gap indicates that Kansas City is an attractive option for potential homebuyers and investors, which could lead to increased demand and, consequently, rising home prices in 2025.
In Kansas City, the most expensive properties are likely to be luxury homes located in upscale neighborhoods such as Mission Hills. These areas are known for their high-end amenities and desirable locations, which naturally drive up property values.
On the other hand, the cheapest properties are often small, older homes in less developed areas like the East Side. These properties may require significant renovations, making them less appealing to buyers looking for move-in-ready homes.
If the median home price in Kansas City were to rise to match or exceed the national average, it would suggest that the market has reached a saturation point, potentially signaling a slowdown in price growth.
Source: Zillow
8) A local in Kansas City can typically afford a house in about 3.6 years, which is reasonable
Signal strength: minimal
In Kansas City, it currently takes around 3.6 years for a local to afford a house, which is considered reasonable. This is based on the median household income of approximately $65,225 and the median home price of about $235,610.
When the time it takes to buy a house is relatively short, it suggests that homes are more accessible to local buyers. This accessibility can lead to increased demand, as more people are able to enter the housing market.
As demand rises, it often results in higher housing prices over time, especially if the supply doesn't keep up. Therefore, the current affordability could be a sign that prices might increase in 2025 as more people look to buy.
If the time to afford a house were to increase significantly, say to over 5 years, it might indicate that housing prices are stabilizing or even decreasing.
Source: USCensus
This infographic designed by our team breaks down the latest livability score in Kansas City but also in other big cities in Missouri. It provides a clear view of which locations offer the best overall living conditions, which is a good thing to know if you want to buy real estate.
9) Kansas City boasts a strong employment rate of 66.1%
Signal strength: minimal
The employment rate in Kansas City is at 66.1%, which is considered high compared to the national average in the United States.
This high employment rate suggests that more people have stable incomes, which can lead to increased demand for housing. When people have jobs, they are more likely to buy homes, and this demand can drive up housing prices in Kansas City by 2025.
The major employment sectors in Kansas City include healthcare, manufacturing, and professional services. Companies like Hallmark Cards and Cerner Corporation employ a significant number of people in the area, contributing to the robust job market.
If the employment rate were to drop below 60%, it might indicate a weaker job market, potentially leading to a decrease in housing demand.
So, are home prices in Kansas City going to rise in 2025? Yes, they are!
In Kansas City, the housing market is poised for a price increase in 2025 due to several compelling factors.
Firstly, the city has a limited housing supply with only 0.48 homes per person, which naturally drives up prices as demand outpaces supply. The tech and startup sectors are booming, attracting more professionals and increasing housing demand. Additionally, home values have already risen by 0.5% since last year, indicating a growing trend.
Moreover, three major websites predict a rise in home prices, with Realtor forecasting a 6.90% increase. Kansas City's livability score of 78 and a strong employment rate of 66.1% make it an attractive place to live, further boosting demand. With 35% of homes selling above the listing price and a decade-long average price increase of 8.2%, the market shows strong momentum.
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- Yes, investing in real estate is a solid option in 2025 in Kansas City